Tollway firms may get OK to collect longer

Updated: 2013-05-09 01:06

By Zhao Lei (China Daily)

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Amendment is to compensate companies for losses during holidays

Tollway operators who have been financially affected by the government's toll-free policy may be allowed to extend their collection periods, according to a draft amendment to the country's tollway management regulation.

"(Highway) operators whose legal revenue is impacted by the toll-free policy can be compensated by properly extending their period of toll collection," the Ministry of Transport said in a draft amendment to the regulation, which took effect in November 2004.

The ministry on Wednesday began soliciting opinions from the public on the draft and has published the amendments on its website. The solicitation will end on June 7.

According to the tollway regulation, the time for non-government-invested highways to collect tolls should not exceed 25 years. Those in central and western regions, which are usually economically underdeveloped, are allowed to extend the period to 30 years.

The amendments also stipulate that investors in highways must sign a franchise agreement with local transport authorities and write down a "reasonable" rate of return in the agreement.

The revenue, expenditures and maintenance information of tollways must be made public for scrutiny, the draft said.

The State Council decided in August that most of China's expressways should be toll-free during four national holidays for passenger cars with fewer than seven seats. The move caused the amount of traffic on the country's expressways to skyrocket during the past National Day holiday in October and this year's seven-day Spring Festival holiday in February.

During the past three-day May Day holiday, more than 5.9 million trips were made through tollways in Beijing, a 30.2 percent increase compared to the same period last year, according to the Beijing Municipal Commission of Transport.

In Jiangsu province, more than 4 million vehicles with fewer than seven seats used expressways during the three-day toll-free holiday, according to the Jiangsu Expressway Network Operation and Management Center.

Though the policy has significantly increased public travel and boosted tourism, highway operators have complained that the measure has cost them heavy losses.

The country's 19 listed highway companies reported a total net profit of 2.7 billion yuan ($439.5 million) for the first quarter of this year, a 330-million-yuan drop compared to the same period last year, according to Zhejiang Hithink Flush Information Network, a stock market information provider.

Major highway operators in Sichuan and Guangdong provinces said their net profits dropped more than 20 percent compared to the same period last year.

The new amendment may please highway operators, but it has encountered fierce condemnation from the public.

"I don't think drivers like me will welcome the measure because a few days of toll-free operation (in each year) will not substantially affect the operators' profitability, but they now could use this clause to prolong their toll collection time," said Cui Zhe, a white-collar worker in Beijing.

"Those who have vested interests in highway business can use this clause to remove all limitations on their toll collections," said a Sina Weibo microblogger who uses the name Lazy Fly. "Monopoly is money."

"It is difficult to define a proper period of time for highway operators to prolong their toll collection periods because each highway has different conditions," said Zhang Changqing, director of Beijing Jiaotong University's institute of transportation law. "Transport authorities should do cost accounting for each operator before approving them to extend toll collection times."

Zhang Zhuting, a professor specializing in traffic laws with the Management College of the Ministry of Transport, said it is reasonable for some operators who manage expressways with high maintenance costs to be allowed to prolong toll collection periods.

"The maintenance of expressways is much costlier than that of regular highways. If operators are not allowed to collect a certain amount of fees (after the original toll collection span ends), then who will be willing to manage and maintain expressways?

"The key is transportation authorities should work out a specific and clear method to calculate how long operators should be allowed to extend the toll collection period."